Would you like to get a car loan but are hindered by your bad credit history? Before making a move, read the rest of this article to learn more about bad credit car loans and how to avoid scams and rip-offered.

The easiest method to get a good card loan:  Apply with a STRONG co-signer

A co-signer with not just a good credit score, but a strong credit HISTORY will make obtaining a car loan at a great interest rate easy.  Finding someone who is willing to put their credit on the line for you can be hard.  You need to be committed to using this opportunity to not only get the car of your dreams at a great interest rate, but this is your chance to rebuild your credit history and start to form good credit habits.

So how can a scammer take advantage of this?   You might think that your loan has been approved through the help of a co-signer. But in reality, the car loan is in the name of the co-signer, not yours at all. While you can get the financing you need, you will not be able to improve your personal credit because the loan technically isn’t yours.

To avoid being tricked, you and your co-signer must be present during the signing of the auto loan contract. Carefully read the Terms and Conditions and if there are statements that seem vague or if there a empty spaces in the document, do not sign the contract.

Car Loan Dealer Tactics

Some auto dealers offer quick approval to convince customers to make the purchase. You might think that your car loan has already been approved and you might even be offered an incredibly low rate. However, two weeks later, you may receive a call from the dealer informing you that you have not been approved for the low rate because of your bad credit score.  They tend to let some time pass before calling you with the bad news.

Why?

Because they want  you to be in LOVE with your new car.  They want to give you time to sell the old car if you didn’t trade it in to them.  They want you in a position that you will say yes to an outrageously high interest rate just to keep the car.  They will graciously tell you, sorry this is the only rate we could get you.  If you want to accept it, just come in and sign the new contract.  Or you can just come back and RETURN THE CAR.  Yeah, now that its your only means of transportation, they want you to bring it back.

Don’t just take this lying down.  Reach out to your local credit union or some other financial institution.   Try to get a better loan.  Most of these dealers will try to pressure you to signing their loan docs right away ad tell you, you can always refinance.  But they dont’ tell you about the early payoff fees they will charge you!   Tell them you need a few days and go get your own financing!  This is the time to call all your friends and family to try to find a co-signer.

But above all things don’t panic.  Act like you are considering bringing the car back!  That usually will throw them for a loop!  They don’t really want the car back so you will be surprised how much they will work with you to avoid this.

Avoid Being a Victim!

Consumers with bad credit are the target of scammers all the time.  Some people see someone with bad credit as an opportunity to charge as many fees as possible and at the highest interest rate.  Here are a few things you can do to avoid being scammed.

• Look at your current debt load and concentrate on reducing it .  Not only will this free up more money for your down payment and monthly payment.  But you will see your credit score improve.
• Get a copy of your credit score (all three)  make sure you know what your credit looks like BEFORE you approach ANY lenders.  Some really bad lenders will ask you if you know what your score is, and when you say no, they leap at the opportunity to tell you its sooooo low it will be a miracle if they get you financed.  They make it seem like they are working a miracle on your behalf. And they are priming you for an outrageously high interest rate!  Know what your score is before you walk into the showroom.
• Before you go out and look for a car, clean up  your credit.  Our site has lots of tools you can use to improve your credit on your own.  Or if you don’t have the time or you don’t have the time to fix your credit on your own, there are professional companies like FES that will help you improve your credit score.
• Once you have improved your credit as much as you can, try to obtain a loan on your own.   Don’t just expect the dealer to get you  the best deal possible.  They only want to get you into a car.  That’s it.  Also keep in mind when you walk into the dealership, if you have your own financing you are in a stronger position to buy.  Don’t fall for the , what kind of monthly payment can you afford.  You tell them you want to know the price of the car!  There are too many ways they can build in fees if you tell them you can afford a set amount.  You end up paying WAY more for the car then you need too.
• Look for bad credit car loan lenders online.  We have a page on our site where we list the biggest ones on the net.  Apply for one of these lenders.   They work specialize in working with consumers with bad credit.
•  If they STILL can’t get you approved.  The strong co-signer is the best route for you until your credit score improves.

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